PHL applies for luggage, travel articles eligibility under US-GSP

By Kris M. Crismundo

MANILA, Nov. 29 (PNA) — The Philippines has petitioned for eligibility of certain luggage and travel articles for duty-free treatment under the United States Generalized System of Preferences (US-GSP) Program, Department of Trade and Industry (DTI) Assistant Secretary Ceferino S. Rodolfo said.

Rodolfo told the Philippines News Agency that the country filed the petition last Oct. 16 under Section 204 of the Trade Preferences Extension Act of 2015 which will provide zero tariffs on travel goods such as luggage, handbags, pocket goods, backpack, sports and travel bags to US-GSP beneficiaries.

The US-GSP gives duty-free access to US market among 122 designated beneficiary countries and territories like the Philippines. However, the program excludes textiles, watches, footwear, handbags, luggage, flat goods, work gloves, and other leather apparel from the zero-tariff-rate benefit under the scheme.

Currently, tariff rates of luggage entering the US market range from 6.0 to 8.0 percent; handbags, 9.0 to 18 percent; pocket goods, 6.0 to 18 percent; and backpack, sports and travel bags, up to almost 20 percent.

“It could lead to at least US$ 500 million exports for the Philippines and 70,000 additional direct new jobs,” the official said.

He added that the petition will undergo hearings and the decision is expected around the first half of next year.

Once approved by the US government, local manufacturers will have better access to the booming industry of luggage and travel goods in the US, Rodolfo pointed out.

The country exports branded bags such as Coach and Ralph Lauren to the US, he added.

The DTI official noted that even small and medium enterprises (SMEs), which make handbags made of recycled materials, leather, water lilies, and other local materials, can also be competitive in the US market with zero tariffs on travel goods and handbags.

He said that even without free trade agreement with the US, 70 percent of the Philippine exports to the market enjoys zero tariff rate through the GSP Program.

Philippine Statistics Authority (PSA) data show that the US is the country’s second largest exports destination with revenue amounting to US$ 6.62 billion in January to September 2015 period.

Rodolfo stressed that exports figures to US can further improve with the approval of the country’s petition for GSP expansion. (PNA)